Only 40% of a CEO’s compensation is fixed, while the remaining 60% is performance-linked, with short-term bonuses and long-term incentives accounting for 25% and 35%, respectively.
The pay packages of other C-suite leaders also saw an uptick, with compensation for roles such as chief operating officer (COO), chief financial officer (CFO), chief human resources officer (CHRO), chief marketing officer (CMO) and chief security officer (CSO) rising between 7% and 11%, according to the release.
For these roles, fixed pay accounts for about 60% of the total package, while the remainder is equally split between short- and long-term incentives.
COOs and CFOs remain the highest paid executives after CEOs, drawing close to Rs 4 crore in total compensation, said the release.
“CXO compensation continues to rise in India with this talent pool remaining restricted and consequently in high demand,” said Anandorup Ghose, Partner at Deloitte India. “We are yet to observe any negative impact of the ongoing correction in the equity markets on CXO compensation. That may come through in next year’s numbers, given the high linkage of CXO compensation with equity prices.”Ghose also noted that companies are rethinking their approach to compensation amid the rising market volatility. “NRCs (nomination and remuneration committees) are already taking cognisance of the rising market volatility and may alter the approach for compensation reviews going forward,” he said.He pointed to particularly sharp corrections in pay within legal, risk, and compliance functions, where absolute compensation has historically lagged behind other roles.
The sixth edition of the Deloitte India Executive Performance and Rewards Survey was launched in September 2024 as an India-specific B2B survey. More than 400 organisations participated in the survey that spanned multiple sectors, though no public sector companies were included.
The survey highlights a shift in how performance is assessed at the leadership level. While short-term incentives now increasingly consider non-financial business metrics, long-term incentives remain largely tied to financial outcomes. Companies are also adopting scorecard-based performance assessments for CEOs and CXOs, balancing financial results with strategic priorities.
There is also a more stringent approach to bonuses. Organisations are paying out smaller annual incentives to executives who miss financial or strategic goals compared to previous years.
The use of stock-based incentives is rising, both in terms of prevalence and value.
“Share-based pay is becoming more intricate with the rising use of performance shares and multiple plans,” said Dinkar Pawan, director at Deloitte India.
But with that comes greater scrutiny. Shareholder rejection rates for new stock plans have quadrupled over the past year, driven in part by proxy advisory firms challenging proposals and influencing voting outcomes.
Pawan said, “New proposals are being put under the microscope to ensure that the interest of all stakeholders is protected. This is a welcome development as enhanced governance leads to better decisions. We are already seeing clear improvements in the quality of proposals going to the shareholders.”